China’s overseas tax collection has obvious benefits. The national treasury has increased by 160 billion yuan.

The transition period for the Chinese government’s “taxation of offshore trust income” policy ended on October 22. Officials announced today that the cumulative personal income tax declared for offshore trusts has exceeded RMB 160 billion (RMB, same below, about US$23.6 billion), and personal tax income increased by almost 90% in October alone.

ChinaMinistry of Finance The State Taxation Administration issued the “Announcement on Matters Related to Personal Income Tax on Offshore Trusts” on July 24, comprehensively tightening the personal tax supervision of offshore trusts. For existing offshore trusts, the government has provided a transition period of 90 days without late payment fees before the new rules are issued in 2026. The transition period ends on October 22, 2026.

CCTV News reported today that according to the State Administration of Taxation, most taxpayers actively cooperated and declared a total of more than 160 billion yuan in personal income tax for offshore trusts, of which more than 120 billion yuan was received in October, leading to an increase of nearly 90% in the national personal income tax revenue in October.

The person concerned, in-charge of the Income Tax Department of the State Taxation Administration, said that the implementation of the policy has achieved remarkable results. In the next phase, taxpayers who make false declarations or fail to make voluntary declaration after the end of the transition period will be charged late fees as per the rules; Taxpayers who still fail to declare or do not declare truthfully even after being requested will take measures such as opening a case for investigation and inspection in accordance with law.

The financial self-media “Liu Xiaobo Talks About Finance” pointed out that the offshore trust income tax is a typical “rich tax”. The range for setting up this type of trust starts at US$1 million, and complex listed equity structures often start at US$5 million. Some organizations estimate the total assets of offshore trusts controlled by Chinese residents to be approximately RMB 2.3 trillion to RMB 2.7 trillion, with the total number being around 10,000 households.

After the official tax announcement, it was rumored that some real estate owners would have to pay billions of yuan in back taxes, but the tax department did not announce any individual tax payments.

The article states that the law requires offshore trusts to pay taxes, but in the past detailed regulations were lacking, information was difficult to obtain and actual collection and management was lax. Most existing offshore trusts had not previously taken the initiative to declare and pay taxes. But now with the application of artificial intelligence (AI), big data and improvements in the Common Reporting Standard (CRS), it is becoming more difficult for rich people to avoid taxes through cross-border transfers of assets.